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Facilities Institute
Houston, Texas

Presented by
Steve Skabla, Vice President
Chief Estimator/Preconstruction Manager
Facilities Institute
July 9 - 12, 2012
Houston, Texas

Presentation Overview
• Overview of Various Project Delivery Methods o Traditional (Lump Sum) Bid o Competitive Sealed Proposals o Design/Build o Job Order Contracting o Construction Manager at Risk
• Explanation of Construction Manager at Risk o Definition o Characteristics o Pros/Cons o Project Examples o Lessons Learned
• How to Evaluate Best Value

What is a “Project Delivery Method”
The process of how a project will be planned, designed and built
OR
Procurement strategy for designing and constructing a facility
OR
Means of contractually communicating expectations and basis of reimbursement
OR
The process of managing how a project will be planned, designed and built

Overview of Delivery Methods
Traditional & CSP Design/Build
Owner
General
Contractor
A/E
S u b c o n t r a c t o r s
Design Bid Construct
Traditional
Price only
CSP
Price and
Technical
Qualifications
Job Order Contract
Owner
Design/Builder
Owner
A/E or
Consultant
JOC
Contractor
S u b c o n t r a c t o r s
Self-
Perform
Select Design Construct
S u b c o n t r a c t o r s o r
E m p l o y e e C r e w s
Select Design Construct
Price & Technical
Qualifications
Price & Technical
Qualifications

Overview of Delivery Methods
Construction Manager at Risk
Owner
Sub
CM
Sub Sub
A/E
Sub Sub
Select Design
Construct
Fees, general conditions and qualifications

Construction Manager at Risk (CM at Risk)
• What to Expect from Your CM o Provide constructability reviews o Provide detailed cost estimates at Schematic Design, Design
Development and at Guaranteed Maximum Price (GMP) o Deliver GMP prior to completion of Construction Documents o Begin construction before design is 100% complete o Bring best subcontractors and best prices to the project o Control costs/budget o Take a business risk o Provide financial guarantees o Act in the Client’s best interest

Preconstruction (Not Just an Estimate & Schedule)
Budgeting
Solicitation
& Pre-
Qualification
Process
Bid Package
Development
GMP
Development
Value
Engineering
Options
Purchasing
Process
Scheduling
Site Logistics
Over-the-
Coordination &
Shoulder
Design
3D Collision
Comprehensive
Planning &
Monthly
Reporting
Process
FF&E
Coordination &
Management
Constructability
Review &
Site
Management
Planning
Budgets
& Schedules
Meeting Life-Cycle
Management Analysis
Team
Communication
Protocols
Job Hazard
Analysis
OCIP/CCIP
Plan
Severe Weather
Preparedness
Testing &
Commissioning
Process
Occupancy
Planning
Quality
Management
Process
Planning for
Service After
Completion

CM at Risk
PROS
• Flexibility in selecting a builder
• CM provides preconstruction services and works in team concept with A/E & Owner
• Usually brought on early in design (program/SD)
• Constructability reviews at each stage of documents
• Opportunity to phase/fast track
• Better opportunity to maximize
HUB/MBE subcontractor participation through bid package strategic initiatives
Facilities Institute
July 9 - 12, 2012
Houston, Texas
• Opportunity for bid strategies on inflationary materials
• Reduces the risk of proprietary specifications
• Change flexibility
CONS
• Price is not guaranteed at time of selection
• Owner must have more involvement in the process
• Difficult to evaluate actual cost between CM at Risk candidates

Lowest Cost vs. Best Value
Best qualified firm will give you the most value for the 91%.

Project Candidates for CM at Risk
Best Suited
• Large new or renovation projects
• Schedule sensitive
• Difficult to define
• Subject to change
Least Suited
• Small or simple projects
Facilities Institute
July 9 - 12, 2012
Houston, Texas

Example: South Texas Research Facility

Texas A&M Univ., Veterinary Imaging & Cancer Treatment Center

CM at Risk Lessons Learned
• The best performers at CM at Risk are the same best performers at CSP and hard bid.
• State procurement laws may vary the process.
o Example: For Texas, 100% CDs and public subcontractor proposals on each package are required prior to any real work.
o It is more work, not less for the Architect and Contractor.
• Allow adequate time for review and approval of the
Guaranteed Maximum Price (GMP).
• Allow adequate time for the subcontractor selection process by the CM and Owner approval

CM at Risk Lessons Learned
• Agree on the subcontractor selection criteria and process early.
• The project design must be sufficiently advanced to have accurate general conditions proposals in the RFP.
• Clearly define what is to be included and excluded from “general conditions” in the RFP.
• Lump sum general conditions - not cost plus.
o The most issues/problems.
o 90% of contract administrator or Owner’s representative’s time on
5% of cost.

CM at Risk Lessons Learned
• Draft a total project schedule, not just a construction schedule.
• Give the CM the entire project budget. Tell the
CM what parts it is responsible for.
• Add example schedule, decision milestones

Benefits of CM at Risk Delivery
Example: 1 Million GSF
Public Hospital
• 4-year project duration
• Items bought early
• Potential cost savings

Pick the Right Delivery Method
• Before starting the selection process, determine which delivery method will provide “best value”
• Factors to consider ( add more ): o Project size and complexity o Time allocated for the construction o Competitiveness of the current/local construction market o Desired flexibility o Availability of contractors and subcontractors in the local market
• After deciding on key factors, evaluate the various delivery methods and formally adopt the method you deem “best value.”

Hand-out

Facilities Institute
July 9 - 12, 2012
Houston, Texas